Debi O’Donovan, editor of Employee Benefits: Recession calls for joined-up thinking on benefits and pay

After just over three years of focusing on other aspects of the Employee Benefits brand, I find myself back in the editor’s chair. I trust that it will be a blessing rather than a curse that I return to the front line during a recession.

The benefits market appears to be holding up well, with employers and their advisers working hard to justify the perks they offer. However, we are seeing organisations fall into two distinct camps.

The first group are those looking to improve the perceived value of their benefits in order to justify spend, and maximise the impact of benefits as part of the reward package, particularly when salary increases are thin on the ground. Employers such as Aviva (see page 8) are launching total reward statements to achieve this.

These employers clearly feel that the need to retain good staff is as important as ever; now is not the time to reduce benefits and cause bad feeling among the good performers who will see you through the tough times.

However, a second group are those who are reviewing benefits and renegotiating adviser fees and product prices in order to cut, or put a cap on, costs. We are also seeing many employers take a close look at the tax structures around their pensions and company car schemes; both involve large sums of money and, if structured well, can deliver substantial savings.

All this is forcing an ever-greater integration of benefits and pay. The two have always been linked, but as our feature, The big chill, demonstrates, employers are ensuring that reward decisions during this recession are being joined up in a way we have not seen before.

A catalyst to this increasing integration is the emergence of ever more sophisticated reward administration systems. Payroll, pensions, flex and wealth-management software continue to evolve in order to give both staff and benefits managers a cohesive overview of the total reward package as detailed in our cover story, Remote control.